Piramal Enterprises dips 10%, hits 52-week low post March quarter results

Shares of Piramal Enterprises hit a 52-week low of Rs 1,679, down 10 per cent on the BSE in Friday's intra-day trade, after the company's financial services business reported loss of Rs 321 crore in March quarter (Q4FY22) due to additional provisioning and interest reversals totaling Rs 1,037 crore. The company had posted profit after tax (PAT) of Rs 243 crore in Q4FY21.

The company said additional provisioning and interest reversal totaling Rs 1,037 crore corresponded to select wholesale non-RE accounts that moved to Stage-2.

The stock has fallen below its previous low of Rs 1,688, touched on May 27, 2021. It has corrected 44 per cent from its 52-week high level of Rs 3,013 touched on October 7, 2021. At 09:52 am, it was down 8.5 per cent as compared to 0.86 per cent rise in the S&P BSE Sensex.

Meanwhile, the company, engaged in financial and pharma business, posted consolidated net profit of Rs 151 crore against a loss of Rs 510 crore in the year-ago quarter. Total revenue grew 22 per cent year on year (YoY) to Rs 4,163 crore from Rs 3,402 crore in Q4FY21.

Pharma sales grew 11 per cent YoY in Q4FY22, led by a 55 per cent growth in the India consumer products (ICP) segment (9 per cent of pharma sales). The strong showing by power brands and healthy launches (nearly 40) drove the superior performance in the ICP segment.

Motilal Oswal Financial Services have cut target multiple to 1x P/BV for the Financial Services business on the back of potential asset quality risks in the Wholesale loan book. "We have cut our FY23/FY24 Pharma EBITDA estimate by 8 per cent/4 per cent to factor in extended supply chain challenges in the CDMO/CHG segment, higher raw material cost, and greater promotional costs in the ICP segment," the brokerage firm said in a result update.

Over the next three years, we expect the company to make meaningful inroads into Retail, led by mortgages and complemented by shorter tenure loans originated through digital partnerships. Product diversification within Retail will help Piramal Enterprises deliver strong growth and reduce concentration risks, the brokerage firm said.